Announcement of Mozambique Receives US30 Million Dollars for ProMaputo, the Maputo Municipal Development Program on January 25, 2007

Mozambique Receives US$30 million for ProMaputo, the Maputo Municipal Development Program Contacts In Washington: John Donaldson (202) 473 1367 jdonaldson@worldbank.org In Maputo: Rafael Saute (258-21) 482324 rsaute@worldbank.org Kate Kuper kkuper@worldbank.org WASHINGTON , January 25, 2007 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* of US$30 million to support the implementation of the Maputo Municipal Development Program, also known as ProMaputo. As the capital of Mozambique, Maputo City ’s development is critical as an engine for growth and investment in the country, as well as for reducing the substantial and growing poverty and inequality in the city. The program utilizes an Adaptable Program Loan (APL), which provides phased support for long-term development programs, using a series of loans that build on the lessons learned from earlier phases. In this case, an IDA Credit for Phase I (three years) of US$30 million has been approved. The IDA contribution to the second phase will be defined at a later stage and subject to key objectives of Phase I being met. “The priority for this phase of the program is to help the Maputo City Council significantly improve its governance, financial stability and institutional capacity in order to provide a platform for sustainable improvements on service delivery to the citizens,”said Kate Kuper, the World Bank Task Team Leader of the program. ProMaputo will be implemented in a way that guarantees ownership, commitment and sustainability. The implementation capacity will be within the structure of the municipality itself under the direct leadership of the Mayor of Maputo and his senior management team. Program coordination, monitoring, financial and procurement functions will be undertaken by the City Council. An ambitious program of institutional restructuring is foreseen under the first component. The program will strengthen the City Council’s institutional and financial capacity to support achievement of long term service delivery goals. It is composed of three components: The first component of the project - - Institutional Development and Municipal Governance – aims at rationalizing the municipality’s internal processes for service delivery; improving the performance of the municipality’s functional units; and improving governance. The second component - - Municipal Finance – seeks to improve the municipal public finance systems and enhance the budget planning, execution, and control functions. The third component - - Planning, infrastructure rehabilitation and service delivery improvements – will support urban planning and target investments to improve and rehabilitate critical urban services identified through a participatory process with residents, including roads and drainage, solid waste management, street lighting, and the construction of a cemetery. This phase of the program is budgeted at US$43 million. Apart from the US$30 million of IDA financing, it will receive US$6.5 million from the Central Government and another US$6.5 million from the municipality’s own revenues generated through the reform process. This financing scheme is intended to catalyze interest from the Recipient’s development partners in supporting Maputo City in the future. GTZ has assisted the City with critical technical assistance for solid waste management since 2001 and has agreed to continue this support conditional on the IDA credit being in place to finance much needed investments. ### For more information, please visit on the World Bank’s work in sub-Saharan Africa visit: www.worldbank.org/afr For more information on the World Bank’s work in Mozambique visit: www.worldbank.org/mozambique For more information about this project visit: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=382131&menuPK=382166&Projectid=P096332 *The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period.